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                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ADP Case No. 14-03357
                    )
)
Applicant for Public Trust Position )
Appearances
For Government: Jeff A. Nagel, Esquire, Department Counsel
For Applicant: Pro se
                                                                            
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Decision
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HENRY, Mary E., Administrative Judge:
Based upon a review of the pleadings, exhibits, and testimony, I conclude that
Applicant’s eligibility to occupy a public trust position is granted.
Statement of the Case
Applicant completed and signed an Electronic Questionnaires for Investigations
Processing for his Public Trust Position (e-QIP) on January 9, 2014. The Department of
Defense (DOD) Consolidated Adjudications Facility, (CAF) issued a Statement of
Reasons (SOR) detailing the trustworthiness concerns under Guideline F, financial
considerations on November 14, 2014. The action was taken under DOD Regulation
5200.2-R. Personnel Security Program, dated January 1987, as amended and modified
(regulation); DOD Directive 5220.6, Defense Industrial Personnel Security Clearance
Review Program (January 2, 1992), as amended (Directive); and the Adjudicative
GE 1; Tr. 25-26.1
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Guidelines For Determining Eligibility for Access to Classified Information (AG)
implemented on September 1, 2006. 
Applicant acknowledged receipt of the SOR on November 24, 2014. He
answered the SOR in writing on December 4, 2014, and he requested a hearing before
an administrative judge with the Defense Office of Hearings and Appeals (DOHA).
Department Counsel was prepared to proceed on February 9, 2015, and I received the
case assignment on March 2, 2015. DOHA issued a notice of hearing on April 16, 2015,
and I convened the hearing as scheduled on May 12, 2015. The Government offered
four exhibits (GE) 1 through 4, which were received, marked, and admitted into
evidence without objection. Applicant testified. He did not submit any exhibits. DOHA
received the transcript of the hearing (Tr.) on May 20, 2015. I held the record open until
June 12, 2015, for the submission of additional matters. Applicant did not submit any
documentation. The record closed on June 12, 2015.
Procedural Ruling
Motions
At the hearing, Department Counsel agreed that the debts identified in SOR
allegations 1.b and 1.c were the same. Department Counsel moved to withdraw
allegation 1.b as duplicative. Applicant did not object, and the motion was granted. SOR
allegation 1.b is withdrawn from the record. (Tr. 24)
At the hearing, Department Counsel orally moved to amend the SOR to include
an additional allegation of debt. Applicant did not object. The motion was granted, and
the SOR was amended to add allegation 1.d under Guideline F. Essentially, the
amendment alleges that Applicant is indebted on a home equity loan in the amount of
$71,829, which has been charged off by the lender-creditor.
Findings of Fact
In his Answer to the SOR, Applicant admitted the factual allegations in ¶¶ 1.a -
1.c of the SOR. Since Applicant did not object to the SOR amendment adding allegation
1.d, his failure to object is deemed an admission of the facts in allegation 1.d.
Applicant, who is 36 years old, works as an enrollment representative specialist
for a DOD contractor. He began working for his employer in May 2008 and in his current
position in May 2014. The record lacks any information on disciplinary action taken by
his employer.1
Applicant graduated from high school in 1997, and he has some college. He
married in September 2006, and he divorced in November 2009. He and his former wife
GE 1; Tr.  25, 35, 37.2
GE 2 - GE 4; Tr. 33-38, 40-41.3
Tr. 27-31.4
GE 2 - GE 4.5
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have a 15-year-old daughter and a 10-year-old son. Applicant currently lives with his
girlfriend and her four children.   2
Applicant earns $18 an hour for a total gross monthly income of $2,880. He pays
$988 a month in child support, which is withheld from his pay. His net monthly income is
approximately $1,200. His rent is $1,300 a month, and his car payment is $300 a
month. He and his girlfriend combine their income to pay household expenses. Her
monthly income is unknown. The total household expenses are unknown as Applicant
did not provide a budget. He indicated at the hearing that they have just enough money
each month to pay their customary expenses and that he has fallen behind in some bills
because of his monthly child support payments, which are current.3
In May 2006, Applicant and his former wife purchased a home for approximately
$375,000. They did not use any of their money as a down payment. Applicant advised
that they financed the home with a first mortgage (SOR ¶ 1.a) and a second mortgage
(SOR ¶ 1.d). When Applicant and his wife separated, they were unable to continue the
mortgage payments on the property. They moved out of the property, and the mortgage
lender foreclosed on the property. Applicant advised that although he has never
received any paper work from the mortgage lenders about the foreclosure sale or
money owed, he is aware that someone is now living in the house.4
The three credit reports in the record show that in May 2006, Applicant and his
former wife obtained a primary, conventional, real estate mortgage with lender A in the
amount of $290,700, and a second mortgage characterized as a home equity loan with
lender B in the amount of $72,650. The February 2015 and the May 2015 credit reports
show that Applicant and his former wife defaulted on the second mortgage in July 2008
and the primary mortgage in September 2008. The three credit reports indicate that
Lender A foreclosed on the property by December 2010 and each show a past-due
amount and a balance. All three credit reports indicate that lender B charged off a debt
of $71,829, with two of the reports showing a charge-off date of February or October
2009. All three credit reports reflect a zero balance on this account.5
Applicant lives in a state that has an anti-deficiency statute to protect
homeowners. The statute states as follows:
No deficiency judgment shall lie in any event after a sale of real property
or an estate for years therein for failure of the purchaser to complete his or
her contract for sale, or under a deed of trust or mortgage given to the
vendor to secure payment of the balance of the purchase price of that real
GE 2 - GE 4; Tr. 31-32, 36.6
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property or estate for years therein, or under a deed of trust on a dwelling
for not more than four families given to a lender to secure repayment of a
loan which was in fact used to pay all or part of the purchase price of that
dwelling occupied, entirely, or in part, by the purchaser.
The provisions of this statute apply to monies used to purchase a home and a mortgage
given at the time of conveyance of property to secure the unpaid balance of the
purchase price. The titling of the second mortgage as a home equity loan does not
change the fact that the money was used to purchase Applicant’s home. The statute
does not apply to property primarily purchased for rental and investment.   
I take administrative notice of the generally known fact that at the time Applicant
purchased his home, the mortgage lending industry routinely 100% financed home
purchases with first and second mortgages. The second mortgages were often titled as
home equity loans.
The three credit reports of record indicate that, except for the mortgages on his
home and the one small credit card debt (SOR ¶ 1.c - $313), Applicant regularly paid all
his bills as required. He stated at the hearing that his monthly child support payments
are making it difficult for him to pay all his bills and that he has fallen behind in some
bills. He stated that he and his former wife would pay the $313 debt. The record lacks
any evidence of financial counseling.  6
Policies
Positions designated as ADP I and ADP II are classified as “sensitive positions.”
Assignment to sensitive duties is that, based on all available information, the person’s
loyalty, reliability, and trustworthiness are such that . . . assigning the person to
sensitive duties is clearly consistent with national interests. The Deputy Under Secretary
of Defense (Counterintelligence and Security) Memorandum, dated November 19,
2004, indicates trustworthiness adjudications will apply to cases forwarded to DOHA by
the Defense Security Service and Office of Personnel Management. Department of
Defense contractor personnel are afforded the right to the procedures contained in the
Directive before any final unfavorable access determination may be made.   
When evaluating an applicant’s suitability for a public trust position, the
administrative judge must consider the disqualifying and mitigating conditions in the AG.
These guidelines are not inflexible rules of law. Instead, recognizing the complexities of
human behavior, these guidelines are applied in conjunction with the factors listed in the
adjudicative process. The administrative judge’s over-arching adjudicative goal is a fair,
impartial, and commonsense decision. According to AG ¶ 2(c), the entire process is a
conscientious scrutiny of a number of variables known as the “whole-person concept.”
The administrative judge must consider all available, reliable information about the
person, past and present, favorable and unfavorable, in making a decision. In reaching
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this decision, I have drawn only those conclusions that are reasonable, logical, and
based on the evidence contained in the record. Likewise, I have avoided drawing
inferences grounded on mere speculation or conjecture.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate,
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” The
applicant has the ultimate burden of persuasion to obtain a favorable trustworthiness
decision. 
A person who seeks access to sensitive information enters into a fiduciary
relationship with the Government predicated upon trust and confidence. This
relationship transcends normal duty hours and endures throughout off-duty hours. The
Government reposes a high degree of trust and confidence in individuals to whom it
grants access to sensitive information. Decisions include, by necessity, consideration of
the possible risk the applicant may deliberately or inadvertently fail to protect or
safeguard sensitive information. Such decisions entail a certain degree of legally
permissible extrapolation as to potential, rather than actual, risk of compromise of
sensitive information.
Analysis
Guideline F, Financial Considerations
The trustworthiness concern relating to the guideline for Financial Considerations
is set out in AG & 18:  
Failure or inability to live within one=s means, satisfy debts, and meet
financial obligations may indicate poor self-control, lack of judgment, or
unwillingness to abide by rules and regulations, all of which can raise
questions about an individual=s reliability, trustworthiness and ability to
protect [sensitive] information. An individual who is financially
overextended is at risk of having to engage in illegal acts to generate
funds. 
The guideline notes several conditions that could raise trustworthiness concerns.
Under AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially
disqualifying. Similarly under AG & 19(c), Aa history of not meeting financial obligations@
may raise security concerns. Applicant and his former wife defaulted on their mortgage
loans and one small debt. They were unable to pay these obligations when required.
The evidence is sufficient to raise these potentially disqualifying conditions.
The Financial Considerations guideline also includes examples of conditions that
can mitigate trustorthiness concerns. I have considered mitigating factors AG ¶ 20(a)
through ¶ 20(f), and the following are potentially applicable:
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(b) the conditions that resulted in the financial problem were largely
beyond the person=s control (e.g., loss of employment, a business
downturn, unexpected medical emergency, or a death, divorce or
separation), and the individual acted responsibly under the circumstances;
and
(c) the person has received or is receiving counseling for the problem
and/or there are clear indications that the problem is being resolved or is
under control. 
Applicant and his wife separated, a factor beyond his control. When their
marriage ended, they were unable to afford their home, and the lenders foreclosed on
their property. AG ¶ 20(b) is partially applicable because Applicant took no action on the
mortgage debt after his separation and divorce. 
Under the state anti-deficiency statute, Applicant does not owe any debt which
may be remaining on the loans for his house because the mortgages are purchase
money loans acquired by Applicant and his former wife at the time they purchased the
property and gave the property as security for the payment of the loans. Applicant has
resolved the major debts identified in the SOR under AG  ¶ 20(c).
Whole-Person Concept
Under the whole-person concept, the administrative judge must evaluate an
applicant’s eligibility for a public trust position by considering the totality of the
applicant’s conduct and all the circumstances. The administrative judge should consider
the nine adjudicative process factors listed at AG ¶ 2(a): 
(1) the nature, extent, and seriousness of the conduct; (2) the
circumstances surrounding the conduct, to include knowledgeable
participation; (3) the frequency and recency of the conduct; (4) the
individual’s age and maturity at the time of the conduct; (5) extent to which
participation is voluntary; (6) the presence or absence of rehabilitation and
other permanent behavioral changes; (7) the motivation for the conduct;
(8) the potential for pressure, coercion, exploitation, or duress; and (9) the
likelihood of continuation or recurrence. 
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a
public trust position must be an overall commonsense judgment based upon careful
consideration of the guidelines and the whole-person concept. The decision to grant or
deny a trustworthiness determination requires a careful weighing of all relevant factors,
both favorable and unfavorable. In so doing, an administrative judge must review all the
evidence of record, not a single item in isolation, to determine if a trustworthiness
concern is established and then whether it is mitigated. A determination of an
applicant’s eligibility for a public trust position should not be made as punishment for
specific past conduct, but on a reasonable and careful evaluation of all the evidence of
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record to decide if a nexus exists between established facts and a legitimate
trustworthiness concern.
In assessing whether an Applicant has established mitigation under Guideline F,
the Appeal Board provided the following guidance in ISCR Case No. 07-06482 at 3
(App. Bd. May 21, 2008):
In evaluating Guideline F cases, the Board has previously noted that the
concept of “‘meaningful track record’ necessarily includes evidence of
actual debt reduction through payment of debts.” See, e.g., ISCR Case
No. 05-01920 at 5 (App. Bd. Mar. 1, 2007). However, an applicant is not
required, as a matter of law, to establish that he has paid off each and
every debt listed in the SOR. See, e.g., ISCR Case No. 02-25499 at 2
(App. Bd. Jun. 5, 2006). All that is required is that an applicant
demonstrate that he has “. . . established a plan to resolve his financial
problems and taken significant actions to implement that plan.” See, e.g.,
ISCR Case No. 04-09684 at 2 (App. Bd. Jul. 6, 2006). The Judge can
reasonably consider the entirety of an applicant’s financial situation and
his actions in evaluating the extent to which that applicant’s plan for the
reduction of his outstanding indebtedness is credible and realistic. See
Directive ¶ E2.2(a) (“Available, reliable information about the person, past
and present, favorable and unfavorable, should be considered in reaching
a determination.”) There is no requirement that a plan provide for
payments on all outstanding debts simultaneously. Rather, a reasonable
plan (and concomitant conduct) may provide for the payment of such
debts one at a time. See, e.g., ISCR Case No. 06-25584 at 4 (App. Bd.
Apr. 4, 2008). Likewise, there is no requirement that the first debts actually
paid in furtherance of a reasonable debt plan be the ones listed in the
SOR.
The evidence in support of granting a favorable trustworthiness determination to
Applicant under the whole-person concept is more substantial than the evidence in
support of denial. In reaching a conclusion, I considered the potentially disqualifying and
mitigating conditions in light of all the facts and circumstances surrounding this case.
Applicant managed his income and paid his bills as shown by the credit reports. When
he and his wife separated, they were unable to continued the mortgage payments on
their house. The two unpaid mortgage loans are the only significant debts identified in
the SOR. The mortgage lenders foreclosed on the property, a legal procedure under
state law. The foreclosure process and the law eliminated any remaining unpaid monies
owed on the property because the two loans on Applicant’s property are purchase
money loans for the property.
Applicant acknowledged that he and his girlfriend have just enough money each
month to pay their expenses. He pays almost $1,000 a month in child support, which is
34% of his gross, not net, monthly income. His child support payments substantially
reduce his available money for expenses. He will struggle to pay his bills without
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additional income from overtime or a second job. He is not living extravagantly or
luxuriously; rather, he is making sure his child support obligation is paid by having it
deducted directly from his pay. In considering all the credit reports in the record, which
are the only information showing Applicant’s financial history, it is clear that Applicant
has been responsible about his finances and his bills.  The one unpaid bill for $313 is
insufficient to conclude that Applicant is not trustworthy. Thus, this debt cannot be a
source of improper pressure or duress. Of course, the issue is not simply whether all his
debts are paid: it is whether his financial circumstances raise concerns about his fitness
to hold a public trust position. While one debt remains unpaid, it is insufficient to raise
trustworthiness concerns. Applicant is on notice that the Government has a concern
about his finances. Should Applicant’s finances spiral out of control in the future, he
could loose his favorable trustworthiness determination. (See AG & 2(a)(1).)
Overall, the record evidence leaves me without questions or doubts as to
Applicant’s eligibility and suitability for a trustworthiness determination. For all these
reasons, I conclude Applicant mitigated the trustworthiness concerns arising from his
finances under Guideline F.
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: FOR APPLICANT
Subparagraph 1.a: For Applicant
Subparagraph 1.b: Withdrawn
Subparagraph 1.c: For Applicant
Subparagraph 1.d: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with the national interest to grant Applicant eligibility for a public trust
position. Eligibility for access to sensitive information is granted.
                                                              
MARY E. HENRY
Administrative Judge